CHAIR (Senator Marshall): I declare open this public hearing of the inquiry into the Equal Opportunity for Women in the Workplace Amendment Bill 2012, referred to the Senate Education, Employment and Workplace Relations Legislation Committee on 1 March 2012 for inquiry and report. The bill seeks to amend provisions of the Equal Opportunity for Women in the Workplace Act 1999 and improve gender equality outcomes in the workplace.

Before the committee starts taking evidence, I shall advise that all witnesses appearing before the committee are protected by parliamentary privilege with respect to their evidence. This gives them special rights and immunities because people must be able to give evidence to committees without prejudice to themselves. Any act which disadvantages a witness as a result of evidence given before the Senate or any of its committees is treated as a breach of privilege. Witnesses may request that part or all of their evidence is heard in private. However, I also remind witnesses that giving false or misleading evidence to the committee may constitute a contempt of the Senate.

I welcome our first witness. Thank you for being here today. The committee has received your submission and now invites you to make some opening remarks to the committee, to be followed by questions.

Ms Kenna: The committee has read the submission of the FSU on behalf of our members. As we noted in our submission, the majority of our members are women workers—some 55 per cent, in fact. Many of these women work for the big four major banks, which, as you know, are amongst the most profitable enterprises in the country. For the 2010-11 financial year, the big four made a combined profit of $24 billion. We submit that these enterprises can afford to implement rigorous equal opportunity or gender equality policies and to be held accountable for reporting on their gender equality programs. You will note from the submission that the FSU is broadly supportive of the Equal Opportunity for Women in the Workplace Amendment Bill, and the submission makes several recommendations.

In the short allotted time this morning, we wish to focus on two key issues that we consider most important to our members. The first is the gender pay gap in finance and how the agency and this bill can contribute to closing the gender pay gap. The second is that we stress the importance of union involvement in accurate gender equality reporting on behalf of members. Firstly, in respect of the gender pay gap, as you may know from reading our submission, part of our approach to trying to close the gender pay gap in our industry is to form partnerships with employers to identify the real pay gaps and set about addressing them. This is important but intensive and laborious work that is not going to close the industry-wide gender pay gap anytime soon. That is notwithstanding the excellent work that we have done, in particular with NAB, that has seen some really good outcomes within that organisation. For this reason, we implore the committee to ensure that the gender equality indicator, equal remuneration between men and women, requires full reporting of total pay and each element of total pay—bonuses, incentives, performance pay elements and so on. So it is not just the reporting of average pay outcomes, as is currently the case. We submit that, if the government is serious about closing the pay gap, reporting to the equal opportunity or gender equality agency must be genuine and must reflect the complexities of remuneration in industries such as finance. We submit that this complexity within remuneration is what leads to our pay gap in the first place. Reported data must enable employers, unions and the government to track progress over time in closing the considerable pay gap in our industry which, as we stated in our submission, is currently 29 per cent between men and women. We cannot close the pay gap in finance while the industry refuses to openly analyse pay data and have genuine conversations about the real pay gap. We commend NAB, as we said, for being prepared to do this over the last several years.

In addition to the equal remuneration indicator, we also stressed the importance of reporting on actual practice in relation to subsection 3(1)(d) of the bill—the availability and utility of terms, conditions and practices relating to, for example, flexible working arrangements, supporting workers with family or caring responsibilities and so on. It is our submission that measuring these factors in a detailed and transparent way will enable employers to demonstrate their progress over time, and for us this would also contribute to closing the gender pay gap by removing some of the key barriers to women's full participation in the workforce.

Finally, to our second key point: consultation with unions. We submit that our experiences with NAB indicate that best practice occurs with employers and unions working together. Of course it is not realistic to expect this in every aspect of an employer's business, but we believe that consultation will result in more accurate reporting under the proposed gender equality act. The union does not believe that there would be an added expense in employers distributing their draft reports to employee representatives prior to making submissions and giving unions a prescribed period to comment. Unions could still pass any outstanding issues to the agency but would at least have an opportunity to provide feedback at workplaces where they have a presence and some knowledge of gender equality matters. We submit that in unionised workplaces this would be the best means of discerning employees' views on the relationship between policy and practice in relation to gender equality.

Just two points on that: I note that the ACTU also strongly supports, in their submission, providing unions with non-aggregated pay data, and, also in relation to that point, I note that the agency itself, EOWA, comments that it may not be realistic for the agency in future to respond to all union comments post submissions being made. We think that that supports our submission that unions should be given drafts of submissions to be made and have an opportunity to comment on those and put those comments forward to the agency at the same time.

Finally, in addition to the examples that we have provided in our written submission, to demonstrate the point that we are able to ourselves keep tabs on what is happening in terms of gender equality in the workplace, via phone calls to the union and of course everyday organising and recruitment of members, an example is some data that I recently looked at from 1 January 2011 to 31 January 2012 which identified nearly 400 calls to the union on queries around parental leave, and in particular there were 98 disputes during that time—so roughly two per week—in relation to returning from parental leave. These 98 disputes generated 358 calls over that period. These disputes represent real-life examples of how employers' policies are applied at the workplace, and the union has been involved in the 13-month period in resolving those disputes. To this end, and finally, we ask that the committee consider our intent in recommendation four of our submission:

FSU recommends that Section 16 of the draft Bill be amended to ensure that employees and employers have 28 days to comment on a draft report before it is submitted, and that these comments are included in the regulatory forms required to be part of the public reporting process, and to be published.

I thank the committee for their time. I will leave my formal comments there.

CHAIR: Thank you, Ms Kenna. Can you explain to me how the pay gap is working in your industry? I understand when we talk about the gap in participation between male and female employees, but is it about equal pay? I am finding it difficult to get my head around it. A senator gets paid what a senator does regardless of gender. In the APS, whatever pay level you are at, that is what you get because it is deemed to be equal work. How does a pay gap operate in your industry?

Ms Kenna: That is a good question. It is really complex in our industry. Initially, this was because we bypassed a lot of the award restructuring that happened in the 1980s in other industries, so we did not have clear classification structures with jobs that had clear relativities to each other. That is the starting point. No-one, of course, is suggesting that men and women are deliberately discriminated against and paid different base rates of pay.

What has happened over time is that performance pay has taken hold to a strong extent within the industry. There are lots of bonuses and commissions, particularly for those jobs that are male-dominated and that are considered to be, for want of a better word, sales jobs—they generate income for the bank. So women not only sometimes miss out on jobs that are the same job but also, more importantly, often miss out on high rates of pay for work of equal value. Currently, from ABS statistics we see that the industry pay gap is one of the highest at 29 per cent overall—and that is full-time, non-managerial earnings.

CHAIR: So that 29 per cent is based on a 29 per cent different amount of remuneration for the same work. Is that what you are putting to us?

Ms Kenna: Yes, that is right. There are all sorts of complexities that sit on top of that and they are about women having access to higher paid roles and those sorts of issues.

CHAIR: Sure. I do appreciate that it is not as simple as just giving an example about a woman being paid 29 per cent less than a man for the same classification—that would have been fixed and addressed already. That is the case isn't it?

Ms Kenna: That is right. This is why it is difficult for us to run a straightforward equal pay case. That is not a remedy available to us at the moment.

Senator CASH: Thank you, Ms Kenna, for your submission. My first question was also in relation to the 29 per cent. In the interests of time, is it possible for you to take this on notice and provide the committee with an explanation of the basis for the figure of 29 per cent? My question is very similar to Senator Marshall's: are you referring to the same work? What I am hearing is that you are not, and that there are a number of elements which come into play which would take us to the figure of 29 per cent—which is obviously a lot higher than the average gender pay gap.

Ms Kenna: Yes, it is. I think I included a footnote in our original submission—

Ms Kenna: which relates back to the category that we use, that is, the ABS category. I am happy to elaborate on that in writing.

Senator CASH: I would appreciate that, thank you very much. Next, in relation to page 2 of your submission, it states that:

Though the major banks have a number of formal policies in place around promoting equal opportunities, (and indeed have won awards for these policies), the application of these policies is piecemeal and sporadic and may not filter down to the employees who must require attention.

Has the FSU advised management of its position in relation to these policies?

Ms Kenna: We have. As I stated in our submission, the bank that is probably the most open to that is NAB. We have certainly done that via the original pay equity audit that we did five years ago, and subsequently. That is how we have been able to measure an absolute increase in the take-up of flexible work practices at NAB—which is excellent.

Senator CASH: In relation to the other three banks, what information have you provided to them in terms of your opinion on their policies and the fact that they may well be award winning but they do not seem to be working?

Ms Kenna: Several times during my time with the FSU-probably three or four times over the last five years.

Senator CASH: I note you do say that a number of these policies are in fact award-winning policies—and I am obviously very pleased to hear that. In your evidence you say you have worked with NAB and it has been quite successful. Westpac refused to meet with you. You have made a request to the ANZ and the Commonwealth with a little bit more success. What steps has the union itself taken to promote these award-winning policies amongst its members?

Ms Kenna: We have provided information by way of information sheets and so on to our members. As you can imagine, it is very difficult to explain the issue of gender pay and equity to our members. Again, as I said in the submission, people say: 'Isn't that illegal? What's the problem?' So it has been pretty hard to campaign around.

Senator CASH: You say there are a number of formal policies in place around promoting equal opportunities. I am talking specifically about those award-winning policies. If they are such great policies, what steps has the FSU taken to ensure that its members are aware of them?

Ms Kenna: The point I was trying to make in this submission is that they are award-winning in that each of the major banks now has the 'Employee of choice for women' citation. We have written to both the previous minister for women, Kate Ellis, and her predecessor, Tanya Plibersek, in respect of our concerns around this. I have also spoken formally in Canberra to Senator Jacinta Collins and other politicians over the years. This is our concern: the policies are in place but they are not actually in place, as far as our members tell us, at the workplace in terms of applying to them in a fair and equitable way. So we think those criteria need to be changed.

Senator CASH: Could you provide the committee with copies of the correspondence that you sent to Kate Ellis and Tanya Plibersek and any responses that you received from them?

Ms Kenna: Absolutely.

Senator CASH: What does the FSU do to ensure that employees are aware of these policies?

Ms Kenna: I would not say it is our job to make them aware of the banks' policies. I would say often it is reactive.

Senator CASH: Even though you say gender equality is so important in the workplace? Do you see that you have any role?

Ms Kenna: Absolutely. We have put out a range of information sheets over the years—and I can send them to you—

Ms Kenna: in respect of equal pay and the right to request flexible working arrangements since the Fair Work Act came into being and so on. But I must say that, given our limited resources and the range of matters affecting members, a lot of this information is provided as a reaction to phone calls to the union and disputes. So we will say: 'Ask your manager for a copy of the policy. What does it say? Go through the process—

Senator CASH: Are these policies available online—or can you only get them via management?

Ms Kenna: Most of them you can only get via management. They are not available on the internet. They are available on the internal intranets within the organisations. So we have to ask for them.

Senator CASH: If an employee of, say, the Commonwealth Bank wanted a copy of the Commonwealth Bank's equal opportunity policy, couldn't they just go online and download it?

Ms Kenna: You should be able to as an employee, yes, but as an external person we would need to ask for that.

Ms Kenna: You do. I also do a lot of work in the health and safety area and I have to say those internal intranet sites are so busy that they might have to do quite a bit of searching to find that information.

Senator CASH: How successful have you been with NAB in terms of your one-on-one negotiations with them and the outcomes you have achieved?

Ms Kenna: I would say very successful and obviously we are happy to say that publicly. They have been genuinely open to this process. I have found, in fact, that with the latest pay equity project we are doing with them there is, if anything, more buy-in from the newer CEO, Cameron Clyne, and his Group Diversity Forum, which is made up of senior executives within the organisation.

Senator CASH: What type of one-on-one contact have you had with NAB that differentiates, say, with Commonwealth, ANZ and Westpac?

Ms Kenna: We meet fortnightly during the life of this project. For example, we are about to start interviewing senior managers within the bank, jointly. I and a colleague from the FSU will rotate during those interviews with NAB people. We have inoculated, if you like, those managers to let them know the reasons for our research and what it means. Obviously it is not about identifying individual managers and their practices, it is about getting general information about how they implement those policies. Then we will be doing that with our members and some of the workforce as well. You cannot compare it. The Commonwealth Bank we have met with twice and—

Ms Kenna: Over—we have met twice; I was not at the second meeting—probably a year. Westpac, as I said, we have not met with. ANZ was several years ago and I think the person we met with has left the bank.

Senator CASH: Have there been ongoing requests to meet with ANZ and Westpac?

Ms Kenna: Probably not ongoing. We do not ask them every month, for example. I would speak to the directors within the FSU who are responsible for those banks and when they could fit that in they would request those meetings.

Senator CASH: Is it possible to provide some time-lining around how many times you have requested to meet with these banks?

Ms Kenna: Sure.

Senator CASH: NAB has obviously been very successful—because you have worked with them—compared to the other banks, which have said no, and now we are seeing regulation being put in place to see if we can bring them to the table.

Ms Kenna: Yes, I am happy to do that.

Senator CASH: In your experience with NAB and the fact that you admit yourself—and I think the literature would say—you have been successful in working with NAB and getting some very genuine outcomes, what is your position on the stick approach with regulation versus working with someone and getting a result?

Ms Kenna: As I said this morning, I think working with someone has excellent results but we do not have the resources and I am not sure it is their priority to do so. We are not going to close the gender pay gap, for example, by doing that any time soon. This is why we have written to subsequent ministers and have made submission to government around this issue for some time. We think the stick is needed. An example is the Employer of Choice for Women criteria. One of the prerequisites for achieving that citation is to show that the pay equity gap at each level within an organisation is lower than the industry average. But if the current reporting does not require going into detail about each of the elements of pay then you are only getting average pay, which has fluctuations within it, and you are not getting the real picture. We can continue to do that but the ABS still tells us that the gender pay gap is 29 per cent. Something's not correlating there. We need these organisations to be more transparent about that, and I think the only way is via legislation.

Senator CASH: If you looked at the NAB compared to the Commonwealth, ANZ and Westpac, and then talked about the gender pay gap, is it 29 per cent? Or is it actually lower because you have worked with NAB?

Ms Kenna: It has actually just come down. I do not know if I am at liberty to say the exact amount because we will report out of this second audit, but we have found that it has come down by about, I think, four or five per cent since the last pay-equity audit that we did five years ago. And it is lower than the average.

Senator CASH: Exactly. And you would put that down to the relationship you have with NAB?

Ms Kenna: Yes, to the work we have done with them, absolutely.

Senator CASH: In the time that we have could I just go to page 2 of your submission. You say, 'In our view, current impediments to putting EEO policy into practice include,' and then you refer to 'inflexible job design'. What type of flexibilities or further flexibilities is the FSU looking for?

Ms Kenna: I suppose—and I must say we often use the word differently to the way employers do—it is things like the fact that some of the higher-paid jobs in banking, that attract high incomes, only seem to be able to be done by working exorbitantly long hours. So straight away you have women—it tends to be a majority of women—with caring responsibilities who cannot access those jobs. That is a pay-equity issue for us. That would probably be the key example.

Senator CASH: Any other types of flexibilities that you would be looking for?

Ms Kenna: Much more flexibility in the right to request flexible working arrangements and returning from parental leave. We gave some examples in our submission, and I have mentioned 98 disputes last year. Managers still do not seem to be educated about how they should approach this. The onus seems to be on the individual employee to write reams of information about how the business can cope with them working in a flexible way; a lot of information, in some instances, going into a lot of detail about their personal arrangements. Then the employer says, 'Sorry, can't do it.' Under the Fair Work Act, if they reject that, they have to put their reasons in writing, but some of the time they do not do that and most of the time they just say, 'Business operational reasons.'

Senator CASH: Is there a reason that those flexibilities, or indeed flexibility generally, cannot be achieved through the individual flexibility agreements?

Ms Kenna: No. I think, though, the individual flexibility agreements require an even greater level of resources and bureaucracy to negotiate. If you are on parental leave, in particular, and you need to come back part time, that should be something that is a little bit easier under the Fair Work Act than negotiating an individual flexibility agreement.

Senator CASH: Could you do that, and could you take on notice—if we can have the information—exactly what flexibilities have been negotiated through the individual flexibility agreements. In particular what I am interested in is why you say there will be greater flexibility achieved under this legislation that cannot be achieved under current legislation through individual flexibility agreements.

Ms Kenna: Okay, sure.

Senator CASH: If you could actually achieve the flexibilities that you are looking at through the Fair Work Act, why is there a need to impose another layer of what I would call regulation on business if there already is that option available and potentially it is not being utilised, or it could be utilised better?

Ms Kenna: I am not sure how easy it will be to find out what is going on on the ground. It might take some time, but I will endeavour to do that.

Senator CASH: Gail Kelly is CEO of Westpac. What has having a woman in that particular position achieved for you?

Ms Kenna: I do not think I am particularly qualified to answer that. I have not done a lot of work with Westpac. She has actually said in a public forum on the ABC's Q&A program, in response to questions on the pay gap, 'We don't have a pay gap. We have had a look and we are fine.'

Ms Kenna: We would dispute that. How can Westpac not have a pay gap when the industry gap is so high? And if they do not have a pay gap, then they should be willing to share that with us. They have not met with us and will not meet with us over that information.

Senator CASH: You seem to recall when Ms Kelly made that comment. Can you provide that to us, because I would like to test that, if at all possible, with the organisation.

Ms Kenna: Absolutely.

Senator CASH: One comment you made in your opening statement was that the FSU does not believe that there will be an added expense if the employer has to send to the union the details of the submissions and then have the unions provide comment on the submissions. When you say you do not believe there will be an added expense, have you done modelling on that?

Ms Kenna: No, I have not. I am going on my much earlier experience in the workforce under the old affirmative action act. I was working for a media organisation back in the eighties. We had to meet with the union in respect of the affirmative action reporting. It was pretty simple. Either we did it as part of another regular meeting with the union or we just had a separate meeting and went through our responses to reporting. We might have followed up with some phone calls. I see it as business as usual.

Senator CASH: You have not undertaken any modelling or spoken to business in relation to what they believe. I am assuming that expense is not necessarily a dollar expense; it could also be a time expense. Do you acknowledge that?

Ms Kenna: I do acknowledge that. This is a priority for the union, so we would certainly not see that as a problem. If you bring in new legislation that requires some effort to show what is really happening on the ground, then that should not be a problem.

Senator CASH: I have got other questions and if I do not have time, Senator Marshall, I may place them on notice.

CHAIR: We may have to come back to you; we will see how we go. I want to follow up with one thing you said about accessing the different positions. You indicated that some of the higher paid positions, in particular in banks, were jobs that involved a lot of time as well. I guess that makes sense. But what has that got to do with gender equity?

Ms Kenna: That is a good question. We think the jobs can be done in a better way. A side issue in our industry is that absolute stress and work overload has increased over recent years. So there is that issue. If women are unable to access those jobs, say, being out on the road, for example, as a mobile banker for long periods, being away from home, working long hours, then we say that is a gender pay equity issue, because women are not able to access those higher paid jobs.

CHAIR: I do not want you to misunderstand the question. I am just trying to explore the options here. Does it not come back to the fact that if you have caring responsibilities, whether you are a male or a female, you are excluded from taking up those sorts of employment because you have those other responsibilities? I do understand that in the community it is more likely than not that women undertake those responsibilities. But how do you get around that? If a job actually involves being on the road, it is not really a discriminatory thing against women; it is a discriminatory thing against people who have caring responsibilities. They are mutually exclusive, aren't they, so how do we deal with that?

Ms Kenna: This legislation and legislation under the purview of the human rights and sex discrimination commission actually go towards addressing that issue. We are saying that if we are operating in a sophisticated labour market we can no longer say, 'You've got caring responsibilities, therefore you can't work in these jobs.' We have to be more creative around that. I will give another example of NAB. They are open, as part of this current project, to go forward once we have finished and have a look at redesigning jobs with this in mind. So it can be done. It may not be able to be done for every job and it is not the only cause of the gender pay gap.

CHAIR: Is it possible, again on notice, for you to maybe give a good example of what was seen as a traditional job that could not be done differently but which in fact was done differently and which then addressed some of the issues that you raised?

Ms Kenna: Absolutely.

Senator BILYK: Thanks, Ms Kenna, for the FSUA submission. Some of my questions have been answered but I was wondering how you felt about this. Some submissions have mentioned that they do not think the new legal obligation should be legal as such and that it should be voluntary. I am wondering what the FSUA's view on that is, and why.

Ms Kenna: Our clear view is that voluntary regulation, for want of another word, does not work. As I have referred to previously, with equal opportunity for women in the workplace and employer of choice citation, we think there are fairly weak criteria that sit within all that. The key element, if I could summarise, is that what is happening in policy and what people are reporting do not, in our view, reflect what actually happens in the workplace. There have been years and years of trying to do this in some sort of gentle way. I think that without, firstly, union and employee involvement and, secondly, regulation you are not going to get a real answer about what is happening on the ground, so real workplace change will not occur. You need to measure how these gender equality indicators change and improve over time.

Senator BILYK: I want to come to the issue of union involvement. Your submission suggests that unions should be able to have input into the report by the employer. A number of submissions are anti that on the grounds of confidentiality and other things. I am wondering what your counterargument to that is.

Ms Kenna: Firstly, the majority of submissions have always been public in any case, so I do not see that that is a problem. Secondly, unions operate in good faith. We have done that with NAB. We have had access to very highly confidential pay data and we have held that close to our chest and only published aggregated data. I do, however, agree with the ACTU submission that we would need to have a look at elements of pay broken down for each submission in order to ascertain what the pay gap is. I do not see how we are different from any other party within the community in respect of that. We are there to represent our members and if we want to get to the bottom of what is actually happening in the workplace then we have to have the sophistication to do that, in my view.

Senator BILYK: One of the views put forward by, I think, the Australian Federation of Employers and Industries questioned the need for employers to identify employee organisations in the workplace and provide them with copies of the report, saying this would be difficult to achieve as employees do not have to disclose union membership.

Ms Kenna: I do not particularly buy that. I cannot speak for other industries but ours is a one-union industry effectively and, obviously, it is very easy to identify us as the key representative union. I would leave that to the committee but I think there is certainly an argument to say, where there is a union presence and an effective threshold number of people working in the business, that should be achievable.

Senator BILYK: Master Builders, for example, said that there would be a negative impact if the bill were imposed on employers, and I presume that was following on from Senator Cash's question about costs and whatever. Have you got anything else to add in regard to that comment?

Ms Kenna: Not in particular. My only distinction would be I cannot see how the recommendation in the current form of the bill, that unions receive a copy of the submission once it has been lodged, is any different in terms of cost impact from actually giving the union a draft copy of that submission prior to it being lodged. In fact, I think that would actually help the agency to get comment all at once, instead of having to then go back to subsequent comments from the union and respond to those.

Senator BILYK: Senator Cash was asking about the responsibility of the union in regard to giving information to union members as to knowing what their rights are. I am wondering if you are able to talk to us about the responsibility of management particularly in regard to the finance sector.

Ms Kenna: It is an interesting industry, because they are quite punitive in terms of employees who are seen to breach policy, but I cannot say that they are necessarily rigorous in ensuring that every employee is across every policy within the organisation—perhaps understandably. As I said, these days I am finding through my work in health, safety and inequality that most of the communication and consultation occurs via putting things on the intranet and leaving employees to go and search for those policies and procedures themselves and try to make sense of them in between getting through their considerable workloads. I am sorry; I have forgotten the original question now.

Senator BILYK: The question was in regard to management's responsibility to explain the rights of workers in regard to the gender equity issues.

Ms Kenna: Yes, I think that is probably the crux of our submission—that there are varying degrees of training of managers to do that and there are varying degrees of application in doing that. The examples we gave in our submission demonstrate that, if managers just had a little bit more information, a lot of the disputes that have occurred around things like returning from parental leave would not turn into disputes. I think they have a large responsibility.

Senator BILYK: Do you think there is a need for education of managers and people in industry that have responsibility to pass this information on?

Ms Kenna: Yes, I do. It is often left to the large HR sections of the big banks, and we find in our work that it does not filter down to those managers, and I think it needs to.